Be wary of a deep correction in gold prices:Gold / U.S. DollarFOREXCOM:XAUUSDGolden_Opportunities I. Core Market Drivers and Fundamental Summary The current gold market is in a tug-of-war between a "Strong US Dollar" and "Potential Safe-Haven Demand & Rate Cut Expectations". Bearish Factors (Short-Term Suppression): Strengthening US Dollar: The US Dollar Index is approaching the 100 mark, hitting a new high since August, diminishing the appeal of dollar-denominated gold. Fed Policy Expectations: The market has scaled back bets on a December rate cut, providing support for the USD and limiting buying interest in gold. Bullish Factors (Underlying Support): Economic Uncertainty: The US government shutdown has entered its 34th day. A prolonged shutdown could dampen economic confidence, potentially forcing the Fed to consider easing. Geopolitical Risks & Global Easing Cycle: These long-term factors drive institutional investors to maintain allocations in gold, providing underlying bullish logic. Focus This Week: The market is awaiting the US ISM Manufacturing PMI, ADP Employment data, and speeches from several Fed officials. These events will directly influence market expectations regarding Fed policy and consequently determine gold's short-term direction. II. Key Technical Analysis Overview Daily Chart Level: Major Trend: The corrective trend from the 4380 double-top high remains unchanged, but last week found support near 3886, showing signs of a stabilizing rebound. Current Pattern: Overall situated within a wide range consolidation, without forming a unilateral trend. Key upper resistance is at 4046 (last week's rebound high), and key lower trend support is at 3950. 1-Hour Chart Level: Short-Term Pattern: Price action shows repeated oscillations and back-and-forth movement, lacking clear unilateral momentum. Consolidation Range: The core consolidation range is 【3960 - 4040/46】. The price is moving back and forth within this range. III. Comprehensive Trading Strategy Core Idea: Before the key data releases, the market is highly likely to maintain consolidation. Therefore, the strategy should primarily focus on range trading, selling near resistance and buying near support, rather than chasing breakouts. Key Price Levels: Resistance Zone: 4040 - 4046 (Strong resistance area, also the main defense line for sellers) Support Zone: 3960 - 3970 (Short-term support area), 3950 (Key trend support and bull-bear dividing line) Specific Trading Strategies: Short Strategy (Sell on rallies to resistance): Entry Zone: Consider batch entering short positions when gold rallies to the 4040-4046 area. Stop-Loss: Set above 4054 (i.e., 8-10 USD above the resistance zone). Targets: Aim for the 3990 - 3960 area; if broken below, further downside towards 3915 is possible. Long Strategy (Buy on dips to support): Entry Zone: Consider batch entering long positions when gold pulls back to the 3960-3970 area. Stop-Loss: Set below 3950 (i.e., below the key trend support). Targets: Aim for the 4000 - 4020 area; if broken above, further upside towards 4040 is possible. IV. Risk Control and Scenario Outlook Breakout Alerts: Upside Breakout Signal: If the price breaks strongly and sustains above the 4050-4070 resistance zone, it could open the door for further gains. The strategy should then shift to looking for buying opportunities. Downside Breakout Signal: If the price effectively breaks below the 3950 key support, it signifies a deepening correction, and a further decline towards the 3900 mark is possible. All long positions require extreme caution. Risk Warning: Trade with light positions and set strict stop-losses to avoid being caught in whipsaws during range-bound markets. Closely monitor this week's US economic data and Fed official speeches. Any surprises could trigger significant market volatility, requiring flexible strategy adjustments. Summary: Gold is currently in a typical pre-key-data/events consolidation pattern. Traders should sell high and buy low within the 3960-4046 range, while closely watching for a breakout direction to capture the next potential trend move.